Pacer Health buys and manages financially distressed hospitals and health care facilities throughout the rural counties of southeastern United States. The company, which had revenues of $50 million in 2007, introduces better management practices to put them on a sound financial footing. But the new economic environment makes the work of Pacer Health significantly more challenging.
Since President Bush urged that all governmental medical records be converted into electronic format, medical IT companies have been thriving. TerraHealth Inc. of San Antonio, which pulled in $31 million in revenues in 2007, offers medical consulting and IT support services to health care organizations, especially those operated by the Department of Defense.
"Government contracts are recession-proof," said Ted Terrazas, the company's chairman and CEO. They offer "more comfort since the contracts are for longer periods of time, although the margins are smaller." TerraHealth hopes to expand its business into the commercial sector. That growth, Mr. Terrazas said, will help "balance our portfolio" and further reduce risk.
Going Green Means Cash
Firms engaged in environmental consulting and remediation services may see a boost this year through government contracts.
Both Kemron Environmental Services Inc. of Laredo, Texas, and Cape Environmental Management Inc. of Atlanta predict stable or even expanding revenues in 2009, in part because much of their work is government contracted or mandated.
For 2009, Kemron CEO Juan Gutierrez predicts a 10 percent rise in revenues over $24 million in 2008. The recession, Mr. Gutierrez said, has put a serious "damper on redevelopment work" that Kemron does for the commercial firms. "Fortunately, up until now, we have not seen any kind of dramatic fall in the federal work," where Kemron does 70 percent of its trade.
Mr. Gutierrez said the No. 1 challenge in 2009 will be locating qualified personnel.
Fernando Rios, CEO of Cape Environmental, foresees growth for his environmental remediation, construction, and fuel systems company. "Our primary client is the Department of Defense, and they always seem to have money," he said. "We are expecting to grow about 25 percent [in 2009] so we are very fortunate." The firm had $93 million in revenues in 2007.
Despite the positive predictions for Cape Environmental this year, Mr. Rios cautions that construction firms in the region are experiencing significant declines. "They are feeling the pain," he said. "Residential and commercial work is way down, but state and local government work also is falling." Many construction firms are expecting a "reduction in revenues by half" in 2009.
Information technology and telecommunications are hurting along with the overall economy. MicroTech LLC, based in Vienna, Va., has achieved close to 1,000 percent growth during the last three years, reaching revenues of $12.5 million in 2007.
The company has fared well in part because of the demand for IT solutions by the Department of Defense and the Department of Homeland Security. The company targets the government with its array of IT services, consulting, and support.
Such governmental sectors, involved in the fight against terrorism, cannot afford to be lax in updating their IT infrastructure.
"Regardless of what you do," said Anthony Jimenez, president and CEO of MicroTech, "the economy is having an impact on everybody."
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